The Liberal government announced $37-billion in new income support measures Thursday as it eases eligibility rules for Employment Insurance while winding down the Canada Emergency Response Benefit.
The CERB program was introduced earlier this year to provide $500 a week to people who have stopped working due to COVID-19. CERB proved to be the most substantial federal support measure related to the pandemic, paying out $68.5-billion as of earlier this month to 8.6 million applicants.
Thursday’s announcement extends that program for one additional month, allowing it to continue into September at a cost to government of about $8-billion.
After that, workers who remain unemployed will have the option of applying to a revised EI program or one of three new income-support programs related to the pandemic.
The new Canada Recovery Benefit is for workers who are self-employed or are not eligible for EI and cannot resume work. The Canada Recovery Sickness Benefit is for workers who are ill or who must self-isolate for reasons related to COVID-19. The Canada Recovery Caregiving Benefit is for workers who are unable to work because they are caring for a child, dependent or family member because schools or daycares are closed due to COVID-19.
The three new programs are expected to cost $22-billion and the expansion of EI benefits is projected to cost $7-billion, bringing the total cost to $37-billion, including the one-month CERB extension.
The measures were announced Thursday by Deputy Prime Minister and Minister of Finance Chrystia Freeland and Employment Minister Carla Qualtrough.
The temporary changes to EI dramatically lower the number of hours required to qualify for EI benefits.
The existing rules require a minimum number of hours worked over the previous year that ranges between 420 and 700. The threshold and size of benefit varies based on the local rate of unemployment.
Thursday’s announcement sets a new temporary minimum of 120 insurable hours for a recently announced new minimum benefit period of 26 weeks, meaning an individual who was laid off after working about three-and-a-half weeks over the past year could qualify for EI payments of at least $400 per week for at least 26 weeks.
As with the existing EI program, benefit recipients are required to be looking for work. The existing Working While on Claim rules allow recipients to accept some work while maintaining some of their benefits. The provision reduces EI benefits by $0.50 for each dollar of earnings.
The government says this lower threshold of 120 hours is meant to address the fact that the pandemic has prevented many Canadians from accumulating the number of insurable hours normally required to access the program.
The EI program is normally paid for by payroll premiums collected from workers and employers. The government said it intends to freeze existing premiums at current levels for two years.
For self-employed workers, the Canada Recovery Benefit, which launches Sept. 27 through the Canada Revenue Agency, will provide $400 per week for up to 26 weeks. Workers will need to repay $0.50 of every dollar earned above an annual net income of $38,000 through their income tax return.
An Aug. 6 report by the Finance Department said the final cost of the CERB is expected to be $80.5-billion while the Canada Emergency Wage Subsidy is projected to cost $83.6-billion. The total projected cost of direct federal support measures related to COVID-19, prior to Thursday’s announcements, was $214.3-billion.
https://www.theglobeandmail.com/politics/article-liberals-ease-ei-eligibility-as-part-of-37-billion-in-new-emergency/
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